Rabi Bhakta Shrestha, promoter director at Unilever Nepal, believes that his company's advertising spending in Nepal will rise substantially after the government barred foreign television channels from airing commercials in the country.

Starting from October 23, the government implemented a clean feed policy for foreign television channels prohibiting them from showing their advertisements, forcing many international brands to increase spending in Nepal to promote their products and services.

“Even though our management has not submitted any plan regarding advertising spending to the board after the clean feed policy was implemented, I believe we should spend more on domestic advertisements,” said Shrestha.

Unilever Nepal, which manufactures a range of home care, beauty and personal care products like soap, toothpaste, cosmetics and food and refreshments, has been airing both domestically made television commercials and dubbed foreign advertisements in Nepal.

The Advertisement (Regulation) Act 2019 not only requires foreign channels to discontinue airing advertisements, it also bars them from airing dubbed foreign advertisements in Nepal.

With Indian television channels, particularly those that air television serials, becoming popular in Nepal, many multinational brands used to invest in Indian television channels targeting Nepali audiences, according to advertising agencies.

“As such investment strategies will no longer work, I think the advertising spending of multinational companies in Nepal will increase by 50-75 percent,” said Shrestha.

Meanwhile, Nepali advertising agencies said that foreign companies have already started responding to the ban against television commercials on the foreign television channels being aired in Nepal.

“With cable and direct to home television service operators conveying the message that they could stop implementing the clean feed policy, many multinational companies are in a wait and see mode whether to invest in advertising in Nepal or not,” said Rabindra Kumar Rijal, president of the Advertising Association of Nepal, a grouping of advertising agencies.

“After the policy was enforced, many foreign companies failed to prepare domestic advertisements for Nepal as it takes time to prepare concepts and shoot amid the Covid-19 pandemic. So, a number of multinational companies have now started to send animated advertisements for Nepal.”

Even though the law had already given an October 23 deadline to conduct preparations after it was introduced last year, the failure on the part of foreign channel distributors in Nepal to show advertisement-free foreign channels has resulted in a number of foreign channels going off the air since October 23.

According to Rijal, animated advertisements of brands like Samsung mobile, Oppo mobile, Pepsodent toothpaste, Dabur Real Juice, Lalhit, the cockroach killer spray, hand sanitisers and lollipop have already arrived in Nepal.

Advertising agencies said such advertisements will be broadcast in Nepal with Nepali voiceovers.

Santosh Shrestha, managing director of Mars Advertising, said they had received a lot of inquiries from multinational companies about the clean feed policy several days before it was implemented.

“Many of them were not sure about its enforcement. After the government implemented it, they were not prepared for such a scenario. So they have started to send animated advertisements as a stop-gap measure,” he said.

According to him, many multinational companies had inquired whether dubbed foreign advertisements could be aired as a better option than animated advertisements.

Nepal's law has also barred airing dubbed foreign advertisements. This, according to Shrestha, has forced them to go for the animated advertisements for the time being.

With a population of around 30 million, Nepal is a sizeable market for international brands. “It is not a small market. Because of a high remittance inflow, many Nepalis spend much on goods and services,” said Rijal.

The government policy, which was rolled out after years of prodding by advertising agencies and the Nepali media industry, is expected to boost investment in advertisements in the country massively. Rijal said advertising revenue was expected to double to Rs24 billion in the next two years.

“Preventing foreign channels from airing advertisements or dubbed commercials on Nepali media will force foreign companies to invest massively in Nepal,” said Shrestha.

Those who don’t spend on advertising in Nepal might lose their markets here. This worries dealers of some foreign brands. Sanjaya Agrawal, chief executive officer of Tele Direct, authorised distributor of Xiaomi mobile phones in Nepal, told the Post that they had talked with the Chinese company about advertisement plans in Nepal after the government implemented a clean feed policy.

“They don’t have any immediate big budget planning for Nepal. So, I fear without foreign advertisements being aired in Nepal, there will be reduced sales in the days to come,” he said.